Courts Dent Gig Companies’ Shield Against `Existential’ Threat

The mandatory arbitration contracts that have stopped drivers for app-based companies like Uber Technologies Inc. and GrubHub Inc. from claiming in court that they’re employees, and not independent contractors, may be on shaky ground thanks to a combination of high-level rulings.

The U.S. Supreme Court ruled this year that contractors as well as employees can be covered by an exemption for transportation workers in the federal law that requires the enforcement of arbitration pacts. At least one federal appeals court has ruled that drivers transporting passengers or delivering goods qualify for that exemption, as long as they’re involved in interstate ...